Advance America (NYSE:AEA), the nation's largest payday lender, recently reported second-quarter earnings. It's hard not to be impressed by its results, especially considering the FDIC's efforts to shut the company down and Georgia's ban on payday loans.

Total revenue increased 15.2%, led by an 11.1% increase in same-store sales. The payday lending industry has been enjoying tremendous growth, with same-store numbers that break double digits quarter after quarter. The only drag on Advance America's earnings was the almost 60% increase in doubtful account reserves, which come straight off the top and bottom lines.

The reasons behind these increased reserves, however, are temporary. There were one-time charges recorded to increase the provision for doubtful accounts as a result of recent operational changes in Michigan, Texas, North Carolina, and Arkansas, all stemming from the FDIC's recent action. The company also experienced a cyclical increase in advances and fees receivable. In addition, Advance America's loss rates grew to 11.2% in the quarter ended June 30, 2005, compared to 10.1% in the year-ago quarter. These loss rates remain in sync with the industry norm.

Like the rest of the industry, which includes First Cash Financial Services (NASDAQ:FCFS), EZCorp (NASDAQ:EZPW), Cash America International (NYSE:CSH), QC Holdings (NASDAQ:QCCO), ACE Cash Express (NASDAQ:AACE), and Dollar Financial (NASDAQ:DLLR), Advance America stock has not recovered to its pre-FDIC edict levels. There's no reason for that whatsoever.

Here's a company estimated to make $0.86 per share this year, and $1.11 per share in 2006. That's a 30% growth rate for a stock trading at 16 times earnings. It has $12 million in net cash, strong cash flow, and CEO Billy Webster does not draw a salary. His holdings are all stock, so his interests are aligned with the company's.

Are there risks? Not many, in my eyes. The Texas legislature doesn't meet for two years; its most recent bill to regulate payday lending, strongly supported by the industry, was killed by opponents who preferred an outright ban. The FDIC can't touch Advance America, and the industry is growing at a 20% clip.

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Fool contributor Lawrence Meyers does not own shares in any company mentioned. Don't be a fool; do your own research before buying or selling any stock.